Financial News

  • 17 May 2014, 13:14

Co-Op Vote On 'Slimmed-Down' Restructure

The future of the struggling Co-op group is to be decided today as radical reforms are voted on at its annual general meeting.

Former City minister Lord Myners has proposed a major shake-up of the 150-year-old business which reported losses of £2.5bn for 2013.

But Lord Myners fears that traditionalists within the organisation are "still stuck in denial" about its problems and will not support the plans.

These include sweeping away the existing 20-strong board of representatives from the co-operative movement, who currently include an engineer, a plasterer and a retired deputy head teacher.

He wants to replace this with a slimmed-down "plc and beyond" structure staffed by professionally-trained directors.

The former Marks & Spencer chairman was appointed a director of the Co-operative Group in December but has announced he is to leave following this weekend's vote.

He has said it was apparent to him from the first time he attended a board meeting that not one of its members had the ability to address the complex issues faced by a group burdened with £1.4bn of debt.

Lord Myners believes that the Co-op will survive but faces the prospect of having to sell assets such as its £1bn funeral care business, in order to meet the demands of its lending banks, if it does not adopt reform.

Resistance to the changes saw chief executive Euan Sutherland leave the group earlier this year saying it was ungovernable.

This weekend's ballot will be decided by representatives of its independent societies and affiliated organisations - who hold 22% of the vote - and others voting on behalf of its regional membership boards making up the remaining 78%.

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